Financial journalists and people working in finance use lots of different expressions to describe price changes in financial markets. These are the most common ones. (Some of these words also appear in Unit 38.)
Small or slow upward movement
Verbs
to advance to firm to be firm to be firmer
-
to gain
to be a little stronger to be slightly stronger
Large upward movement
Verbs
Nouns
to jump to leap to rocket to shoot up to skyrocket
to soar to strengthen to surge to take off
a jump a leap
Upward movement following previous downward movement
Verbs
Nouns
to stage a comeback to rebound to recover
\ /
a comeback
a rallv
j
a rebound
to revive to rally
\ /
a recovery
Small or slow downward movement
Verbs
Nouns
to dip to lower
to decline to slide
to drift down to ease
to weaken
to slip or slip back
to be or come under pressure
-
a decline a slide
Large downward movement
Verbs
Nouns
to crash to dive to drop to sink to skid to slump to plummet to fall sharply to go south
to go or fall through the floor to plunge or take a plunge to suffer a drop or a setback to take a beating or a knock to tumble or take a tumble
Note: Some verbs have irregular past forms, for example leap - leapt - leapt; shoot - shot - shot] fall - fell - fallen.
Language reference - numbers
Saying and writing numbers
Everyone working in finance uses a lot of numbers. Saying and understanding numbers or figures in a foreign language can be difficult.
This is how numbers above 100 are said, and written in legal contracts and on cheques:
100 a hundred or one hundred
200 two hundred (not two hundreds)
1,000 a/one thousand
1,100 a/one thousand one hundred or eleven hundred
1,234 a/one thousand two hundred and thirty-four
or twelve hundred and thirty-four
2,200 two thousand two hundred
100,000 a/one hundred thousand
1,000,000 a/one million
1,000,000,000 a/one billion
1,000,000,000,000 a/one trillion
BrE: uses 'and' in figures - a hundred and twenty-five thousand; AmE: doesn't use 'and' in figures - a hundred twenty-five thousand
English uses a comma (,) to separate large numbers into groups of three digits, counting from the right.
12,345 twelve thousand, three hundred and forty-five
12,345,678 twelve million, three hundred and forty-five thousand, six hundred and seventy-eight. Note: English does not use a raised comma (12'345).
Saying amounts of currency
The name of a currency is said after the number (or in the middle of the number), but is written before the number.
ˆ10 ten euros
$10.95 ten dollars ninety-five
¥50,000 fifty thousand yen
£3.50 three pounds fifty or three fifty
The smaller currency unit (e.g. cents or pence) is not usually said.
Decimals
English uses a point (.) for decimal numbers. The numbers before a decimal point are said normally. All the digits after a decimal point are said separately.
1.25 one point two five
12.45 twelve point four five
3.14159 three point one four one five nine
If the decimal is a unit (of money, for example), both parts can be said like normal numbers.
87.65 eighty-seven point six five
$87.65 The stock is trading at eighty-seven sixty-five.
Fractions
h
a half
5/i6
five sixteenths
h
a third / one third
?/32
seven thirty-seconds
u
a quarter / one quarter
1V2
one and a half
u
three quarters
two and two thirds
/5
a fifth
Ordinals
BrE: a quarter;
AmE: a quarter, a fourth
To put things in an order, use ordinal numbers.
This is the forty-seventh floor
/
47th floor
1st
(the) first
60th
(the) sixtieth
2nd
(the) second
61st
(the) sixty-first
3rd
(the) third
62nd
(the) sixty-second
4th
(the) fourth
100th
(the) hundredth
5th
(the) fifth
1,000th
(the) thousandth
6th
(the) sixth
Saying sequences of numbers
0 is called zero (or sometimes in Britain, nought).
the one oh six bus
After a decimal point and in telephone numbers, room numbers, bus numbers, etc., British English uses oh.
room seven oh four
For telephone numbers, fax numbers, bank account numbers, credit card numbers, passport numbers, etc., people usually say each digit separately, but in groups of two, three or four digits.
0202-456-1414 oh two oh two, four five six, one four one four
An exception is double numbers:
0255-226-3344 oh two double five, double two six, double three double four
A rising intonation is used at the end of each group of numbers except the last one, which has a falling tone, showing that the end of the number has been reached.
00 44 1223 325 566
Numbers as adjectives
a ten-thousand euro bonus a fifty-thousand dollar car
When a number is used as part of an adjective, it is always singular (i.e. it doesn't have an -5 at the end).
a twenty-minute walk a four-syllable word
a two-hour flight a five-person team
a three-day holiday a six-figure number
If you find saying long numbers difficult, practise reading numbers aloud from a business newspaper, or using your personal documents, telephone book, etc.
Language reference - word stress
Long words can be divided into different parts, each of which is a unit of pronunciation. These units are called syllables. The word syl-la-ble has three syllables, u-nit has two, pro-nun-ci-a-tion has five.
In spoken English, syllables are either stressed or unstressed (or accented and unaccented). In the following examples the syllable following the (') mark is stressed.
■ One syllable of nouns ('business), verbs (in vest), adjectives [ex pensive) and adverbs {'quickly) is stressed.
■ Prepositions (m, at, to), pronouns (he, me), and articles (a, the) are usually unstressed.
1 The usual rule for two-syllable words is to stress the first syllable. 'asset 'budget 'credit
2 Most three-syllable words are also stressed on the first syllable. 'auditor 'capital 'corporate
3 Most words of four or more syllables are stressed on the third syllable from the end. col'lateral e'conomy lia'bilities
4 Because not all syllables are pronounced in English, some words which look like they have three syllables are reduced to two, and some words which look like they have four syllables are reduced to three. This means that these words are stressed on the first syllable. In the examples below, the letters marked [ ] are not pronounced.
bus[ ijness int[ e }rest int[ e J resting secret[ajry diction [ a ]ry
5 However, there are lots of exceptions to these rules. The most common one is that most (Latin) prefixes are not stressed, but even this rule has an exception since the pre- in 'prefix' is stressed.
co- collect con- connect pre- pre1 diet
com- component ex- expect pro- pro'vide
6 There is a large group of two-syllable words which are both a noun and a verb, or an adjective and a verb, which are stressed on the first syllable of the noun or adjective, and the second syllable of the verb.
We're looking for 'finance - we need someone to finance the company. We're using a new 'transport company to trans'port the goods from China.
Two-syllable words that follow this stress pattern include:
Because of this rule, and the large number of verbs that begin with a prefix, more two-syllable verbs are stressed on the second syllable than the first (despite rule 1 above).
Where these words are also adjectives (a 'perfect product, an 'import barrier), they are stressed like the noun. Where the adjective is the same as the past participle of the verb (perfected, un ported), it is stressed on the second syllable, like the verb.
7 Most suffixes are unstressed. Exceptions include:
-ation
alio'cation
depreciation
integration
-ition
po'sition
acquisition
con'ditional
-otion
pro'motion
pro 'motional
-ution
institution
so 'lution
distribution
-ee
employee
trainee
guar an'tee
-eer
car eer
engin 'eer
Suffixes do not normally change the three-syllable rule, so 1advertising and 'organizer are stressed on the first syllable, although they are four-syllable words.
8 There are various regular patterns of syllables (often at the end of a word) that come just after a stressed syllable.
■ Most words ending in -ic, -ical and -ically are stressed on the previous syllable. auto ymatic eco'nomic bis'torical syste'matically
■ Most words ending in -ial, -ially, -ual, and -ually are stressed on the previous syllable. com'mercial financially \annual individually
■ Most words ending in -ible, -ity and -ify are stressed on the previous syllable. con 'vertible converti1 bility di'versify
■ Most words ending in -ious, -eous and -nous are stressed on the previous syllable. 'obvious simul taneous am'biguous
9 The last letter of a group of initials is usually stressed.
AC/M ATM BP'S IP'O LB'O OTC PL'C USA VAT
Language reference - British and American vocabulary
British English
American English
aluminium
aluminum
Annual General Meeting (AGM)
Annual Meeting of Stockholders
Articles of Association
Bylaws
balance sheet
balance sheet / statement of financial position
base rate
prime rate
building society
savings and loans association
cash dispenser
ATM (Automated Teller Machine)
chairman
president
cheque
check
convertible share
convertible bond
corporation tax
income tax
cost centre
cost center
creditors
accounts payable
current account
checking account
debtors
accounts receivable
depreciation
depreciation / amortization
Extraordinary General Meeting (EGM)
Special Meeting
financial year
fiscal year
fixed assets
property, plant and equipment
flat
apartment
flotation
initial public offering (IPO)
gearing
leverage
index-linked fund
tracker fund
labour
labor
managing director
chief executive officer (CEO)
Memorandum of Association
Certificate of Incorporation
merchant bank
investment bank
net profit
net income
note or banknote
bill
ordinary shares
common stock
overheads
overhead
own shares
treasury stock
petrol
gasoline
|PLˆ
listed company
preference shares
preferred stock
profit and loss account
income statement
shareholder
stockholder
shareholders' equity
stockholders' equity
shares
stocks
shopping centre
shopping mall
social security
welfare
stock
inventory
stock take
count of the inventory
traveller's cheque
traveler's check
true and fair view
fair presentation
visible trade
merchandise trade
Answer key
1 social security, salary
2 earn, commission
1.1
7 tax
8 rent
9 pension
4 mortgage
5 currency
6 overtime
3 bonus
1 false - most money ... consists of bank deposits
2 true - salaries are usually paid monthly and wages are usually paid weekly
3 false - commission is a percentage of the income they generate, which can change
4 true - money paid by a company or the government to a retired person is a pension
1.2
5 false - most people pay one or the other, depending on whether they are buying or renting their home
l
2.1
3.1
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4o
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5 f
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s
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v
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6s
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h
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h
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w
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1 bookkeeping, a bookkeeper
2 external auditing, an independent auditor
3 management accounting, a management accou
4 financial accounting, a financial accountant
5 accounting, an accountant / internal auditing, ;
3.2 1c, 2e, 3a, 4b, 5d
3.3 carry out an audit do an audit establish rules follow rules make rules
set rules apply standards establish standards use standards record transactions summarize transactions
5.1 1 false - a company ... has a separate legal existence from its owners, the shareholders
2 false - the owners are not fully liable for - or responsible for - the business's debts ... Their liability is limited to the value of their share capital
3 true - managers and executive directors run the company for its owners
4 true - Non-executive directors are often more objective
5 false - partners are fully liable or responsible for any debts the business has
6 false - partnerships are not legal entities, so in case of a legal action, it is the individual partners and not the partnership that is taken to court
7.2 1 false - Companies can choose their accounting policies ... There are a range of methods of valuation ... and measurement
2 false - accounting policies ... have to be consistent, which means using the same methods every year, unless there is a good reason to change a policy
3 true - Areas in which the choice of policies can make a big difference include depreciation ... [and] the valuation of stock or inventory
4 false - companies have to give a true and fair view of their financial situation - meaning there are various possibilities - rather than the true and fair view - meaning only one is possible
5 true - in many countries accounting follows the historical cost principle: the original purchase price of assets is recorded in accounts, and not their (estimated) current selling price
6 true - some countries with regular high inflation ... use inflation accounting systems that take account of changing prices
7.3
Noun(s)
Verb
Adjective
'calculate
calculation
—
—
consistency
consistent
—
con'vention
conventional
'measure
'measurement
—
pre'sent
presentation
—
Value
'value, valu'ation
'valuable
8.1 1 f, 2d, 3e, 4c, 5b, 6a
8.2 1 financial year / fiscal year 2 subsidiary
3 consolidated financial statements
4 verifiable
8.3
Verb
Noun
Adjective
as'sume
assumption
—
dis'close
disclosure
—
—
objectivity
objective
'recognize
recognition
—
—
subjectivity
sub'jective
Verify
verification
'verifiable
1 verify 3 objectivity
2 disclose 4 assume
9.1 1 revalue 4 obsolete
2 current assets 5 fixed assets
3 appreciate 6 wear out
9.2 deduct costs depreciate fixed assets record market value record purchase price reduce profits reduce value
1 record, purchase price
2 fixed assets, deduct, costs
3 reduce, value
9.3 1 e, 2c, 3a, 4b, 5d 10.1 1d, 2c, 3a, 4b
10.2 check accounts check stock take check systems of control comply with laws comply with policies comply with procedures comply with regulations examine accounts examine systems of control give advice give opinions
10.3
Noun
Verb
Adjective
—
'accuracy
'accurate
com'ply
compliance
—
recom'mend
recommen 'dation
recom'mended
re'cord
'record
—
ex'amine
examination
—
1 examine, accurate, comply
2 recommendations
3 recorded
11.1 1 true - American and continental European companies usually put assets on the left and
capital and liabilities on the right ... most British companies use a vertical format, with assets at the top, and liabilities and capital below
2 false - A balance sheet does not show how much money a company has spent or received during a year
3 true - Since assets are shown as debits ... and the total must correspond with the total sum of the credits ... assets equal liabilities plus capital (or A = L + C)
4 true - shows the company's liabilities, and its capital or shareholders' equity ... Part of this is share capital - the money the company raised by selling its shares
5 false - assets equal liabilities plus capital
6 true - Liabilities are obligations to pay other organizations or people: money that the company owes, or will owe at a future date
1 2.3 Current assets: cash in the bank, debtors, stock
Fixed assets: buildings, land, investments
Intangible assets: goodwill, human capital, reputation
13.1 1 false - Current liabilities are expected to be paid within a year of the date of the balance sheet
(if it has been paid, it is no longer a liability and will not appear on the balance sheet)
2 true - current is defined as within a year of the date of the balance sheet
3 true - accrued expenses are charged against income - that is, deducted from profits - even though the bills have not yet been received or the cash paid
4 true - Shareholders' equity includes: the original share capital ... share premium: money made if the company sells shares at above their face value - the value written on them ... retained earnings
5 false - shareholders' equity includes retained earnings - it is money belonging to the shareholders and not the company
3 deferred
4 accrued
6 true - share premium is money made if the company sells shares at above their face value - the value written on them
13.2 1 current liabilities
2 share premium
1 3.3 Assets: Accounts receivable, Cash and equivalents, Inventory, Investments, Land and buildings Liabilities: Accounts payable, Accrued expenses, Deferred taxes, Dividends, Long-term debt
5 financing
6 operations
7 investing
14.2
4 pre-tax income
5 net profit
1 sales revenue
2 gross profit
3 EBITDA
1 Operations
2 Investing
3 Financing
4 operations
14.1
Operating activities: Changes in operating assets and liabilities, Depreciation and amortization expenses, Income taxes payable, Net income
Financing activities: Dividends paid, Issuance of stock, Payments to repurchase stock, Repayment of debt
14.3
Investing activities: Purchase of plant and equipment, Sale of property
3 ratio
4 solvency
1 liquidity
2 efficiency
15.1
3 acid test, quick ratio
4 current ratio
1 5.2 acid test
current ratio dividend cover liquid assets quick ratio
1 false - a savings account or deposit account ... pays more interest
2 true - If the borrower doesn't repay the mortgage, the bank can repossess the house or flat
3 true - traveller's cheques ... are protected against loss or theft
4 true - Commercial banks ... discovered that most of their customers preferred to go to branches
19.3
5 false - customers preferred to go to branches ... especially ones ... which were conveniently situated in shopping centres (but not all branches are)
4 building societies / savings and loans associations
5 commercial/retail/High Street banks
6 investment/merchant banks
7 investment/merchant banks
21.2
8 insurance companies
4 clearing bank
21.3
1 central bank
2 investment bank
3 private bank
5 retail/commercial/High Street bank
22.1
Adjective(s)
Noun(s)
Verb
Noun for people
a'cquire
acquisition
—
—
ad'vise
ad'vice
adViser or adVisor
—
'analyse
a'nalysis
'analyst
analytic, analytical
'institute
institution
—
institutional
in'vest
investment
in'vestor
—
Value
Value, valuation
—
Valuable
23.1
22.3
22.2
1 underwritten
fees
2 advised
merged
3 divesting, acquiring
IPOs
1 consulting firm
subsidiary
2 pension fund
institutional investor
3 strategic planning
financial restructuring
4 forecasters
valuation
1b, 2a, 3d, 4c, 5c
23.2 a monetary c stability b supervising d financial
23.3 bank run
currency markets exchange rate financial system financial stability monetary policy
1 monetary policy, financial stability
2 bank run, financial system
5 creditworthy
6 spread
7 output
8 invest
4 d overdraft
5 b hire purchase
3 currency markets, exchange rate
24.1 1 interest rate
2 solvency
3 labour
4 floating rate
24.2 1 e discount rate
2 c base rate or prime rate
3 a mortgage
24.3 1 false - The discount rate is the rate that the central bank sets ... When this rate changes, the
commercial banks change their own base rate ... This is the rate from which they calculate all their other deposit and lending rates
2 true - When interest rates fall, people borrow more, and spend rather than save
3 false - The higher the borrower's solvency, the lower the interest rate they pay
4 true - Borrowers can usually get a lower interest rate if the loan is guaranteed by securities or other collateral
5 true - The rate that borrowers pay depends on their creditworthiness ... The higher the borrower's solvency, the lower the interest rate they pay (the bigger the risk, the higher the interest rate)
6 true - mortgages often have floating or variable interest rates that change according to the supply and demand for money
25.1 1 true - a business or government that needs cash for a few weeks only can use the money
market
2 false - to borrow or invest short-term capital
3 false - T-bills are ... usually sold at a discount ... rather than paying interest ... Commercial paper is ... also sold at a discount
4 false - Certificates of deposit are issued by banks
5 false - Commercial paper ... is unsecured
6 true - Certificates of deposit ... are issued by banks to large depositors who can then trade them in the short-term money markets
25.2 1 discount 4 short-term 7 maturity
2 competitive 5 unsecured 8 cash flow
3 liquidity 6 redeemed 9 par value
25.3 1b, 2c, 3a, 4e, 5d
26.1 1d, 2c, 3a, 4b, 5e
26.2 Customers of Islamic banks: 2, 3, 5 Customer of conventional banks: 1, 4
26.3 investment account service charge
risk capitalists working captial
1 working capital 3 risk capitalists
2 service charge 4 investment account
27.1 1 true — currency in circulation ... makes up only a very small part of the money supply. The
rest consists of bank deposits
2 false - time deposits [are] bank deposits that can only be withdrawn after a certain period of time
3 true - To measure money you also have to know how often it is spent in a given period ... the quantity of money spent is the money supply times its velocity of circulation
4 true - the central bank ... use[s] monetary policy to try to control the amount of money in circulation, and its growth
5 false - [the monetary authorities] can change commercial banks' reserve-asset ratio ... the percentage of deposits a bank has to keep in its reserves
27.2 broad money money supply narrow money
1 money supply
2 narrow money
3 Broad money
27.3 1 monetary authorities
2 monetary policy
3 monetary growth
R
K
L
A
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N
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U
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ID.
U R
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M
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A
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E N T R E
28.1
R
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28.2 1e, 2f, 3b, 4a, 5d, 6c
1 prospectus
2 stock exchange
3 investors
4 going public
5 flotation
6 to underwrite
7 preference shares
8 ordinary shares
9 bankrupt 10 liquidation
29.1
1 false - only successful existing companies can go public
2 true - An investment bank underwrites the stock issue: guarantees to buy the shares if there are not enough other buyers
3 false - The company gets independent accountants to produce a due diligence report
5 false - holders of preference shares are repaid before other shareholders, but after owners of bonds and other debts
offer shares go public
29.2
29.3
produce a prospectus underwrite an issue
1 rights issue
2 nominal value
3 to capitalize
4 secondary market
5 market price
6 own shares
7 primary market
30.1
1 go
2 public
3 offering
4 shares
5 produced
6 prospectus
7 underwriting
8 issue
■ newly issued shares [are] sold for the first time [on] the primary market
■ over-the-counter markets such as NASDAQ ... and AIM ... have fewer regulations market price ... depends on supply and demand - how many sellers and buyers there are automatic trading systems ... match up buyers and sellers
30.2
1 false
2 false
3 true •
4 true
5 true
The spread or difference between these prices is their profit or mark-up
5 income stock
6 rights issue
7 scrip/capitalization/bonus issue
1 value stock
2 defensive stocks
3 blue chips
4 growth stocks
1 bear market
2 bull market
3 crash
30.3
31.1
8 own shares
Possible answers:
1 They buy stocks in issues that are over-subscribed, so they can immediately re-sell them at a profit.
2 Because if a company makes a profit but does not pay dividends, its stock price will rise, and stockholders can make a capital gain by selling the stocks. Capital gains are taxed at a lower rate than dividends, which are income.
3 By agreeing to sell something at a fixed price, and then buying it at a lower price.
make a capital gain make a profit own securities pay a dividend pay tax
receive a dividend retain earnings take a position
1 pay, tax, receive, dividend, retains, earnings, make, capital gain
31.2
31.3
2 make, profit, taking, position, securities, own
32.1 1d, 2b, 3a, 4c
1 false - Fundamental analysis ... ignores the behaviour of investors and assumes that a share has a true or correct value
2 true - Fundamental analysis ... assumes that a share has a true or correct value, which ... reflects the present value of the future income from dividends
3 true - Investors can reduce these by having a diversified portfolio
32.2
32.3 33.1
4 false - Unsystematic risks are things that affect individual companies (and their shares)
1b, 2c, 3a
1 principal
Treasury bonds
2 credit rating
coupon
3 gilt-edged stock
Treasury notes
4 default
yield
5 maturity date
insolvent
33.2 1 true - The holders of bonds ... get their money ... back on a given maturity date
2 false - if a company ... declared bankrupt ... boldholders will probably get some of their money back
3 true - The highest grade (AAA or Aaa) means that there is almost no risk that the borrower will default
4 false - if interest rates rise, so that new borrowers have to pay a higher rate, existing bonds lose value
6 false - convertibles ... are bonds that the owner can later change into shares ... the buyer gets the chance of making a profit with the convertible option
7 true - zero coupon bonds ... pay no interest but are sold at a big discount on their par value
8 false - Bonds with a low credit rating (and a high chance of default) are called junk bonds
5 commodities
6 to hedge
7 futures
33.3 1 C, 2C, 3B, 4B
34.1 1 spot price
2 backwardation
3 over-the-counter
4 forwards
4 A, w
5 B, u
6 C, y
1 A, x
2 B, z
3 B, v
34.2
34.3 1 true — currencies, interest rates, stocks and stock market indexes fluctuate ... so financial
futures are used to fix a value for a specified future date
2 false - Interest rate futures are agreements to issue ... bonds, certificates of deposit, money market deposits, etc.
3 true - Interest rate futures are agreements between banks and investors and companies to issue fixed income securities ... at a future date
4 true - the buyer and seller of a financial future have different opinions about what will happen to exchange rates, interest rates and stock prices
5 false - Futures trading is a zero-sum game, because the amount of money gained by one party will be the same as the sum lost by the other
2 to take a long position 4 to take a short position
37.2 1 false - Despite their name, hedge funds do not necessarily use hedging techniques
2 true - Most hedge funds use gearing or leverage, which means borrowing money as well as using their own funds
3 false - they generally specialize in high-risk, short-term speculation
4 true - investors can profit from price differences between the two markets ... the price difference is usually very small (and would be zero if markets were perfectly efficient)
5 false - structured products from banks ... are customized ... financial instruments
37.3 1 Leverage 3 Full Participation
2 Capital Protection 4 Yield Enhancement
38.1 1 c, 2a, 3b
38.2 1 remained stable 4 grew slowly
2 risen regularly 5 sharp increases
3 increased rapidly
38.3 Possible answer:
The price of gold rose steadily during 1985-7, reaching a peak of $500 an ounce at the end of 1987. The price fell again in 1988-9. The price fluctuated rapidly in 1990, and declined slowly during 1991-2. After a sharp rise in 1993, it remained stable for four years before falling dramatically between 1996 and 1999. Gold bottomed out at nearly $250 in both 1999 and 2001. Since 2001 there has been a steady rise to over $400.
39.1 1 acquisitions 3 merger
2 joint venture 4 raid, takeover bid
39.2 1 white knight, hostile
2 friendly
3 poison pill
39.3 1c, 2d, 3a, 4c, 5b
40.1 1 parent company
2 core business
3 asset-stripping
4 subsidiaries
40.2 1b, 2d, 3a, 4e, 5c
5 leveraged
6 market capitalization
7 synergy
40.3 1a, 2f, 3b, 4e, 5c, 6d
4 time value of money
5 purchasing power
6 discount rate
1 discounted cash flow
2 rate of return
3 internal rate of return
41.1
1 false - The return we could get by investing the money in other ways is the opportunity cost of capital
2 true - the rate of return must be at least as high as we could get by depositing the money in a bank instead, or by making another risk-free investment
3 false - there's nearly always inflation, so cash will have lower purchasing power in the future: you'll be able to buy less with the same amount of money
41.2
4 true - the value of money decreases over time
41.3 1b, 2e, 3d, 4c, 5a
42.1 1 price-sensitive
2 compliance
3 insider dealing
4 money laundering
5 fraudulent
6 disclosure
7 oversee
42.2 1c, 2a, 3e, 4b, 5d
1 laundering money
2 conflicts of interest
3 compliance officer
4 insider traders
5 Chinese walls
6 deregulation
42.3
43.1
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44.1 1 true - In theory, exchange rates should be at the level that gives purchasing power parity (PPP)
... In fact, PPP does not work
2 false - if the price level in a country increases because of inflation, its currency should depreciate
3 true - Financial institutions, companies and rich individuals all buy currencies, looking for ... short-term capital gains if a currency gains in value
4 false - currency speculation [is] buying currencies in the hope of making a profit ... looking for high interest rates
5 true - currency traders make considerable profits from the spread between a currency's buying and selling prices
6 false - Over 95% of the world's currency transactions are purely speculative, and not related to trade
7 true - gold convertibility ... ended in 1971, because ... the Federal Reserve did not have enough gold to guarantee the American currency
8 true - For 25 years after World War II, the levels of most major currencies ... were fixed ... Since the early 1970s, there has been a system of floating exchange rates in most western countries
44.2
9 false - If there are more buyers of a currency than sellers, its price will rise; if there are more sellers, it will fall
Verb
Noun(s)
Noun for people
Adjective(s)
appreciate
appreciation
—
—
con'vert
convertibility, con'version
—
con'verted
de'predate
depreciation
—
—
inter'vene
intervention
—
inter'ventionary
'speculate
speculation
'speculator
'speculative
4 converting
5 speculators
6 intervene
44.3
1 depreciate
2 appreciate
3 speculation
45.1 1 true - a letter of credit ... is a written promise by a bank to pay a certain amount to the seller
... when the bank receives instructions from the buyer
2 true - a letter of credit ... is a written promise ... to pay a certain amount ... within a fixed period
3 false - Documentary credits are usually irrevocable, meaning that they cannot be changed unless all the parties involved agree
4 false - the bill of lading is a document ... confirming that the goods have been received for shipment
5 true - If a bill is endorsed by a well-known bank, the exporter can sell it ... in the financial markets ... This way the exporter gets most of the money immediately, and doesn't have to wait for the buyer to pay the bill
6 true - the exporter can sell it at a discount ... When the bill matures, the buyer receives the full amount
45.2 1f, 2a, 3c, 4d, 5e, 6b
45.3 accept a bill of exchange draw up a bill of exchange endorse a bill of exchange sell a bill of exchange write a bill of exchange prepare documents present documents require documents sign documents describe goods receive goods sell goods transport goods
1 accepted/endorsed
2 describe
3 sell
4 signs, received
5 present
6 DEQ
7, 8 CFR / CIF
9, 10, 11 DAF/CPT/CIP
46.1
1 EXW
2 FCA
3 FAS
4 FOB
5 DES
12, 13 DDU/DDP
u
m
47.1
m
48.1 1 peak 4 trough
2 downswing 5 recovery
3 recession 6 boom
48.2 1d, 2e, 3c, 4b, 5a
48.3 to get bigger or make bigger: boost, expand, increase, inflate, raise, rise, reflate, stimulate to get smaller or make smaller: contract, cool down, cut, decrease, deflate, reduce
4 capital transfer tax / inheritance tax / estate tax / death duty
5 income tax and social security tax / national insurance
6 tariffs
7 capital gains tax
49.2 1 direct 4 progressive tax
2 proportional tax 5 indirect
3 social security
49.3 1 false - Most countries have a capital gains tax ... at a much lower rate than income tax
2 true - Business profits are generally taxed twice, because after the company pays tax on its profits, the shareholders pay income tax on any dividends received from these profits
3 false - Indirect taxes such as sales tax and VAT are called proportional taxes, imposed at a fixed rate. But indirect taxes are actually regressive
4 true - excise duties [are] additional sales taxes on commodities like tobacco products, alcoholic drinks and petrol
5 true - Multinational companies often register their head offices in tax havens - small countries where income taxes for foreign companies are low
6 true - some employers give their staff ... perks, such as company cars
7 false - Using legal methods to minimize your tax burden ... is called tax avoidance
3 implement, strategies
4 reach, customers
8 false - perks ... loopholes [are] ways of getting around the law ... called tax avoidance